VIENNA - Iran gave an upbeat assessment on Tuesday of talks with the U.N. nuclear watchdog about its atomic activity but diplomats voiced doubt inspectors would gain access to a military site where they believe tests of use in making atomic bombs were carried out.

The discussions tested Iran's readiness to address U.N. inspectors' concerns over suspected military dimensions to its nuclear work ahead of diplomatic negotiations on the programme's future in Baghdad next week between Tehran and six world powers.

The International Atomic Energy Agency (IAEA) aimed at the May 14-15 meeting in Vienna to secure agreement on access to Iranian sites, documents and officials involved in suspected research that could be put to producing nuclear explosives.

"We had good talks. Everything is (on the) right track. The environment is very constructive," Ali Asghar Soltanieh told reporters as he entered an Iranian diplomatic mission to continue the meeting with the Vienna-based IAEA.

Western diplomats will be watching the talks for any sign Iran is ready to make concrete concessions as a positive message ahead of the May 23 encounter in Baghdad.

But Soltanieh's public optimism was not matched by the head of the IAEA delegation, Deputy Director General Herman Nackaerts, when senior agency experts arrived at the venue.

"You will understand I cannot make any comments now. The discussions are obviously continuing today," Nackaerts said.

The IAEA, the U.N. agency tasked with preventing the spread of nuclear arms in the world, said its priority is to visit the Parchin military complex where Iran may have conducted high-explosives test relevant for developing atomic arms capability.

Iran, which rejects Western accusations it is seeking nuclear weapons, has resisted previous requests by the IAEA to go to Parchin southeast of Tehran.

The issue was expected to be raised during the talks in the Austrian capital, but a Western diplomat said he would be "very surprised" if Iran suddenly opened up Parchin, suggesting he did not expect serious headway on the issue.

Another diplomatic source also said he did not believe the Vienna discussions were making much progress but that the situation could still change.

Israel, widely believed to hold the Middle East's only nuclear arsenal, and the United States have not ruled out military action to prevent Iran from obtaining atomic bombs if diplomacy fails to achieve this goal peacefully.

DIPLOMACY SEEKS TO AVERT WAR THREAT

An IAEA report last November found that Iran had built a large containment vessel in 2000 at Parchin in which to conduct tests that the U.N. agency said were "strong indicators of possible (nuclear) weapon development".

It said a building was constructed "around a large cylindrical object". An earth berm between the building containing the cylinder and a neighbouring building indicated the probable use of high explosives in the chamber.

The IAEA said it had obtained satellite images that were consistent with this information. The vessel was designed to contain the detonation of up to 70 kg (154 pounds) of high explosives.

Western diplomats say they suspect Iran is now cleaning the Parchin site to remove incriminating evidence.

One envoy told Reuters he had seen satellite imagery showing vehicles near the place the IAEA wants to see, and an apparent stream of water coming from the building. "It is credible ... compelling," the diplomat said about the suspicions.